Most of the One, Big, Beautiful Bill has already landed. A few pieces have a 2027 switch on date, which means the planning conversation is now and the filing consequence is later. Here are the three worth knowing before the season. One. The scholarship contribution credit starts January 1, 2027 A new nonrefundable credit for individuals who contribute to a qualifying scholarship granting organization. Up to $1,700, and anything you cannot use carries forward five years. Two things make this different from an ordinary charitable deduction. It is a credit, not a deduction, so it comes off tax rather than off income, which makes it worth the same to a client in any bracket. And it depends on the state electing to participate and on the organization qualifying. So the first real question for a client is not how much to give, it is whether their state is in. The IRS has now named it and put up a page for it. It is the federal scholarship tax credit, the FSTC, and the charities are scholarship granting organizations, SGOs. A state has to elect to participate and hand the IRS a list of the qualifying organizations in that state, and for 2027 that list is due by January 1, 2027. The IRS is already publishing which states have made an advance election, so you can look up whether your state is in before you advise anybody: https://www.irs.gov/government-entities/federal-state-local-governments/federal-scholarship-tax-credit-fstc Nothing to do on a 2026 return. Everything to do with what you tell a charitably inclined client in December about where the 2027 gift should go. Two. The 1099 threshold starts moving The $2,000 reporting threshold for Forms 1099-NEC and 1099-MISC applies to payments made in 2026. For calendar years after 2026 it gets indexed for inflation. So it will not be $2,000 forever and it will not be a round number for long. Practical effect: stop putting the threshold in your client letter as a fact and start putting it in as a number you look up. The offices that get burned are the ones running on a template written three years ago.

Most offices treat September and early October as cleanup. It is not cleanup. It is the only window in the year where you can still change how next season goes, because in January you will be too busy to change anything. First, the deadlines - September 15 has already gone. That was extended Form 1120-S and Form 1065 for calendar year filers, and the third quarter estimate. If one of those did not go out, do not let it sit. The late filing penalty on a partnership or an S corporation is charged per month, per partner or shareholder, so a two owner return quietly doubles every month you wait. - October 15 is the one still in front of you. Extended individual returns, and it is a Thursday, so there is no weekend to hide in. - Remember what an extension actually bought. Time to file. Not time to pay. Any client who extended and did not pay has been accruing interest and failure to pay penalty since April. Second, the four things to do while it is quiet 1. Check your EFIN return count in e-Services. Compare what the IRS shows against what you actually filed. If theirs is higher, somebody is using your number. This takes ten minutes and almost nobody does it. 2. Fire the clients you are going to fire. The chronic late ones, the ones who argue about the fee every year, the ones who bring you a shoebox on April 12. Doing it in October is a professional conversation. Doing it in February is a fight. You know which files these are. 3. Set your prices before anybody asks. Written, by return type, with what is included and what is extra. If you set prices while a client is sitting in front of you, you will set them too low. Every time. 4. Update the engagement letter. Scope, fee, what you need from them, when you stop working if they do not send it, and how disputes go. If you have never used one, this is the year. Third, the capacity number Take how many returns you filed last season and how many hours you worked. Divide. That is your real throughput, not the number you tell people. Now decide how many returns you actually want to do next season and what they have to average in fee to hit your income target.

If you take one thing from the S corporation half of Corporations Mastering, take this. Reasonable compensation is where the money is, where the exposure is, and where most preparers are guessing. Why the number exists An S corporation shareholder who works in the business is an employee. Wages carry FICA. Distributions do not. So there is a permanent incentive to call everything a distribution and nothing a wage, and the whole body of law here exists to push back on that. The rule is short. A shareholder who performs services must be paid reasonable compensation for those services, and the IRS can recharacterize distributions as wages when he is not. Rev. Rul. 74-44 said it in 1974 and the courts have been saying it ever since. What actually loses cases The cases that go badly for taxpayers are not close calls about whether $60,000 or $80,000 was reasonable. They are cases where the owner paid himself nothing, or something absurd, while pulling six figures out as distributions. - In Spicer Accounting, an accountant worked full time in his own firm, took no salary, and took distributions. The Ninth Circuit had no difficulty calling them wages. - In Joly, same pattern, same result. - In Watson, an accountant in a profitable firm paid himself $24,000 and distributed roughly $200,000. The court accepted the government's expert and moved a large slice into wages. Watson is the useful one, because the taxpayer was not paying zero. He was paying too little, and too little was enough to lose. How to actually set it There is no formula in the code and anyone who gives you a clean percentage is selling something. What defends the number is a documented process. The factors the courts keep using: 1. What the person actually does. Hours, role, whether he is the one generating the revenue. 2. Training, experience and credentials. 3. What the business would pay a stranger to do that job in that market. 4. What comparable businesses pay comparable people. 5. The company's own history and what it can afford. 6. How much of the profit is really from his labor and how much is from capital, employees or systems.